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Too Dangerous To Play In Deepwater?

We’ve been hearing a lot of garbled information about the deepwater drilling ban in the Gulf. Here’s what investors should know!

Earlier in the week, the administration issued a new six-month moratorium on deepwater oil drilling in the Gulf of Mexico, replacing an earlier ban that had been struck down by U.S. courts as being too broad.

The new ban will suspend most deepwater activities, just like the old one; impacting 21 rigs total.

And in an attempt to avoid additional legal challenges, the new ban is based on the type of equipment being used -- not solely the depth of the water, as in the first moratorium.

Under the agency's revised plan, oil drilling in shallow waters can continue if companies are in compliance with new safety and environmental rules.

Also, existing deepwater offshore platforms producing oil and gas are not affected by the new order.

What’s must you know before you trade?

I expect Transocean , Diamond Offshore , Halliburton and the other big names to be just fine, says FBR analyst Robert Mackenzie on Fast Money. They have the balance sheets to work through this.

The biggest negative is for the smaller public and private service companies that work almost exclusively in the Gulf of Mexico region. For example, Hornbeck Offshores , is largely concentrated in the Gulf; they may be facing challenges.



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Trader disclosure: On July 13, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Seymour Owns (AAPL), (BAC), (INTC), (MSFT); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (SPY); Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (BP) Calls; Finerman Owns (GOOG); Finerman's Firm Owns (JPM), (JPM) Leaps; Finerman Owns (JPM); Fimerna's Firm Owns (MCD); Finerman's Firm Owns (RIG) Calls; Finerman's Firm Owns (YUM); Terranova Owns (ADI), (GOOG), (APC), (GMCR), (MYL), (BAC), (ABT), (AXP), (HES), (AMZN), (SUN), (SMH), (MYL), (MRVL), (ADI), (EMC), (CVS), (AKAM), (ADBE), (MON), (KCE), (FCX) ; Terranova Owns (FCX) July Calls; Kelly Owns (BP) Puts; Kelly Is Short (GS); Jon Najarian Owns (SCHN), Is Short (SCHN) Calls; Jon Najarian Owns (STLD), Is Short (STLD) Calls; Jon Najarian Owns (BP), Is Short (BP) Calls

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